Can Trumpcare Cure Obamacare?

His pick to lead the DHHS has some good therapies.

President-elect Donald Trump may be a disaster on many policy fronts but he may well be just what the doctor ordered for America's ailing health care system. And

bitzcelt via Foter.com / CC BY-NC-ND

his pick to lead the Department of Health and Human Services—Rep. Tom Price (R-Ga.)—is a good indication of that.

Price, an orthopedic surgeon, isn't perfect. But he has clear ideas about health care reform that may well cure some of the worst aspects of Obamacare.

Obamacare promised near-universal coverage while lowering premiums without jeopardizing existing plans or providers. Remember President Obama's "If you like your doctor, you can keep your doctor, period. If you like your plan, you can keep your plan, period."?

In reality, Obamacare will account for $1.8 trillion in new spending over 10 years. Yet it will cover only 31 million of the 48 million uninsured. That's partly because more employers have dumped their workers on ObamaCare than originally anticipated—and partly because 8 to 9 million fewer people have enrolled in the exchanges than expected.

The big reason why the exchanges aren't able to lure customers is that median premiums have skyrocketed 116 percent in the last four years, notes Avik Roy of the Foundation for Research on Equal Opportunity. Rising premiums price out too many young and healthy people, especially if they aren't sufficiently poor to qualify for big subsidies. This has left the exchange pools with older and sicker patients, which, in turn, leads to more premium increases, which prices out more healthy people, and so on and so forth. Some fear that Obamacare may have already entered an irreversible death spiral of adverse selection.

Liberals want to prop up Obamacare by throwing more money at insurance companies (by extending the risk corridor and reinsurance programs beyond their 2016 expiration date) while forcing more people to buy coverage through harsher penalties. This would be both pricey and draconian, while doing nothing to actually bend the spending cost curve, another failed Obamacare promise.

Price, who authored a 250-page Obamacare replacement bill called the Empowering Patients First Act, has a better answer. There is much to quibble about in his plan. (For example, his proposal to end defensive medicine by having a federally empowered board prescribe best practices that would provide doctors a safe harbor from lawsuits is an attack on patients' rights.) But he gets the fundamentals right.

Price understands that the reason 48 million Americans lacked health insurance before Obamacare even though the country spent 16 percent of its GDP on health care—more than any industrialized country—was a combination of two things: One, half of all Americans received a blank check to consume virtually limitless health care via lavish tax-exempt employer plans. And, two, too many mandates and regulations on providers and insurers prevented them from innovating new and cheaper ways of delivering care. The limitless demand and the limited supply was a recipe for inflation that left coverage out of the reach of working-age Americans who didn't get employer insurance and didn't qualify for Medicaid.

For starters, Price would deregulate the medical industry, scrapping Obamacare's many mandates on insurance companies, save the one concerning pre-existing conditions. (Insurers won't be allowed to turn away patients, no matter how sick, if they have maintained continuous coverage. And those who haven't maintained coverage will be required to pay 150 percent of the normal rate for two years.) Price would also stop ordering insurers to cover a lavish set of minimum benefits to qualify to sell their plans on exchanges.

Furthermore, Trump's new HHS secretary would cap tax deductions for work-based insurance coverage at $8,000 for individuals and $20,000 for families. This is by no means stingy, but over time it would save the government money. This money—plus the money generated when Obamacare's subsidies are scrapped—would be used to extend new, universal, age-adjusted tax credits to all Americans: $1,200 for individuals between 18 and 35, and $3,000 for those over 50.

These credits are less generous than the subsidies many lower-income folks receive under Obamacare, to be sure. But bear in mind that they will be available to everyone, even middle-income Americans, many of whom Obamacare leaves high and dry. Their bigger virtue, however, is that they eliminate the root cause of health care haves and have-nots in America: the differential tax treatment of employers and individuals.

The Price plan would scrap Obamacare's individual mandate. That means no one would be forced to buy coverage against their will. The Republican's wager is that the availability of "free" tax credits combined with cheap plans will prompt the young and healthy to voluntarily buy coverage, leading to more actuarially sustainable risk pools for insurers. He plans to sweeten the deal even further for young individuals and families through more generous Health Savings Accounts.

These accounts allow people to set aside a lump sum of money tax-free every year to pay for high-deductible plans as well as use toward other out-of-pocket medical expenses. Any leftover funds can be rolled over into subsequent years. Price plans to offer a $1,000 one-time refundable tax credit to encourage more people to set up these accounts and let families stash away more than the current $6,750 limit. And because leftover funds accumulate over the years, patients would get an incentive to limit their own medical consumption, bringing down costs over time without government rationing. Equally importantly, because patients will be paying out of pocket, they'll be more price conscious, creating incentives for providers to come up with innovative ways to deliver cost-effective medicine. Uber for health care, anyone?

Obamacare enthusiasts insist that the Price plan will cover fewer people than their beloved law because it would scrap Medicaid expansion and block grant the program to states, which would be free to eliminate or scale back coverage for swaths of people. In addition, Price's scheme to put sick people who can't buy coverage in the individual market into high-risk pools paid for by the government is dicey, critics say.

Some of these objections are fair. The Price plan certainly won't deliver nirvana. But then, neither has Obamacare. In fact, an imploding Obamacare will jeopardize the coverage of far more patients than a workable alternative. And Price's plan relies less on sticks and more on fixing the incentives so people purchase coverage voluntarily and consume it prudently.

Price's No. 1 job after assuming office will be to make everyone see that and move full speed ahead to repeal Obamacare and replace it with something resembling his plan. Let's hope he does.

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I think the AG was always going to be an insider position. There’s no mandate in Trump’s electorate for a radical reform of the federal legal code. So you put a Senator from a safe GOP state in and now you have someone to send over who is part of the club when you need to. You and I could wish for a reformer, but that’s not what a populist is going to do.

I think that reform is actually very popular now, even some in the GOP Congress are starting to get on board. I hope Rand Paul filibusters Sessions. He may be able to get enough Republicans and Democrats to join him to stop his appointment.

“O’Neill, in other words, would like the FDA to stop performing one of its primary functions and let all of us act as lab mice. Such a move might allow drug makers to rake in tons of cash on untested medical treatments that might not ever work.”

I nearly burst my bladder laughing. Is that covered under the Republican program?

I’ve heard quite a bit of this lately. The FDA and their cronies and sycophants are more worried about regulation for the pure sake of regulation than they are about people being able to manage their own healthcare. In fact, they don’t want anyone to have any decision making about their own healthcare, they want TOP.MEN telling you what drugs you need to take and which ones you are forbidden from even trying. They would ban vitamins and supplements if they could and in fact they’ve already tried it.

I guess I’m torn on some of this. Its hard to determine efficacy on terminal patients. So if you treat them, and they don’t die in the 95% of time most people with the same condition die in, then you treat someone who isn’t yet terminal and they die more quickly than nontreatment would, how do you suss out the effects?

SLD, I’m not saying the FDA should delay approval, but as they are currently the only way to do rigorous human trials, any advice I get from my doctor will probably be based upon FDA trials. Its a chicken and egg problem about how to most safely gather high quality data to make informed decisions.

Every single day my colleagues and I give drugs to patients in non-FDA approved therapies that have been proven effective in clinical trials. The FDA has also significantly delayed the approval of drugs and therapies in the US that have already been proven effective and are in routine clinical use in other 1st world countries. Fuck the FDA!

It’s as simple as this. We’re supposed to be free in this country. You want to take an experimental treatment? Sign a paper acknowledging the risk and accepting the responsibility. The FDA are not out to protect people anymore than the DEA is. They’re a huge fucking bureaucracy whose main goal now is to protect their fiefdom and get a bigger budget. And there’s a great deal of cronyism and corruption involved.

The FDA is pointless. The EU and Canada both test drugs. If the pants-pooping portion of the populace demands drugs be tested, why re-create the wheel? If it’s legal there, it’s legal here – along with the above mentioned waiver for terminal diseases.

Plus, once the left starts shitting their pants over it, you just throw their socialized nation fetish back in their face–“What, are you saying the regulatory systems of 1st World civilized nations like Canada and the EU aren’t rigorous enough for your taste?”

Thalidomide worked for its intended purpose. However, anyone taking in drugs, supplements, alcoholic beverages, etc WHILE PREGNANT puts their unborn baby at risk. That is also a personal decision. After all, as a woman I can KILL my unborn baby legally. The law calls it a fetus, and many people see it as an unviable tissue mass and as a woman’s property. So even though what I put into my body impacts the development of the fetus, under the law, it should still be my right to do so.

The FDA could also legalize everything but rate the damn drugs on a scale of 1-5 or 1-10 in terms of its approval level. 1 basically being quack medicine but hey, your body your choice, and 10 being aspirin – tried and true, virtually all side effects known and efficacy well demonstrated.

Don’t conflate how an experimental trial is done with people seeking long shot treatments. The latter is useless for getting data, but no reason why the former can’t be happening while people still have a choice on their own to try it or not try it.

I guess I’m torn on some of this. Its hard to determine efficacy on terminal patients.

You can’t if the only measure of efficacy is survival for X months.

For terminal patients, you maybe need a different measure, more quality-of-life oriented. Of course, that also raises the issue of whether improving someone’s quality of life should be covered by insurance.

Hey, the author said might. That totally covers him or her from any criticism of the statement, right? I mean, in some universe there is definitely some chance of that happening, no matter how infinitesimal.

This reminds me of how confused my wife was when I said I wasn’t interested in watching Affleck and Damon’s new show Incorporated. These people clearly have no idea how businesses or the market works and I’m not going to subject myself to bed wetting fear mongering on a weekly basis.

Maybe I missed the joke, but it seems like it’s a generic account for the same two suckasses to constantly hide behind. But that doesn’t seem right either, as they’re both too self-assured of their correctness to want to hide their name.

It’s the “Author” of any post that links to a full article elsewhere on the reason.com site. All of Steve Chapman’s columns appear that way now, but not only him (and the other suckasses). The blurb usually names the author too.

Did someone else log in as Dalmia? This article doesn’t have hyperbolic presuppositions. I’m not sure if I yet disagree with the position taken, as I don’t have enough information to make an informed judgement on the matter, but I like the change of pace.

Ok, so maybe Trump did something right here, or at least attempted to. But what happens when he appoints a new DEA head and they put advil, tylenol, coffee, tobacco, sinus medicine, chocolate, and tea on schedule 1?

All of those things have drugs on them so I wouldn’t be surprised. I’ve heard people argue before that ALL drugs are illegal. Literally all of them. When I heard someone say that I couldn’t even respond. Like, do you even know what that would entail?

Some people are trying to give Trump the benefit of the doubt, before completely passing judgement on him. He’s never served even one day in office. I was the same way about Obama in 2008 before he took office. I figured, well Bush is gone, that’s good, maybe Obama will be ok. Reason has been attacking Trump for a year now without a lot of evidence to back it up. He said mean stuff, OMG!

“Fixing” Obamacare is where the problem – and my main beef with the GOP in general and Trump in particular – starts. The best thing you can do to start addressing a hell of a lot of problems is get your damn mitts off it. Forget passing new regulations to create some fantastic vision of Everybody Gets A Free Lunch!, repeal a shitload of the old regulations and see if the situation improves. I’d start with getting rid of the AMA and challenging the Constitutionality of the laws on non-competition in healthcare delivery as a restraint of trade issue.

In my area, we have a Walmart that’s “allowed” to offer a walk-in clinic and we have low-cost clinics where Nurse Practitioners do the routine stuff but in lots of areas that stuff is banned more thoroughly than Uber offering a cheap ride to the airport. We still only have two medical schools in the state and most places only have a single hospital – why? Because nobody is legally allowed to compete with the monopoly and some people absurdly cling to the notion that competition raises prices due to duplication of services. I’m sure they’ll find a cure for cancer long before they find a cure for that kind of stupid.

Three other companies were ready to start distributing generic Epi-pens. Somehow the good old boys at the FDA decided they didn’t have enough chops to do it. No competition? Raise the price with no worries. That’s how good old cronyism works.

I’ll bet the clinic publishes a list of prices for services offered – you know up front what you’ll pay for getting a tetanus shot, for an office call, etc. Health care pricing has always been a mystery, so no one “shops.” And the fact that there is different pricing for insurance than there is for the cash-paying customer makes it more baffling, as well as more expensive for anyone choosing to self-insure for common ailments and illnesses. The ubiquity of health insurance is one of the factors that helped create massive inflation in health care costs.

The front bit, where she’s going on and on and on about Republican election strategy, is dry but probably interesting to someone. The lede is buried halfway down the page:

When agents of the Louisiana Horticulture Commission found out that Sandy was managing the floral department of an Albertsons grocery store without a license, they threatened to shut it down. The store had no choice but to let her go and hire a state-licensed florist instead. Prevented by government from doing the only work she knew, Sandy had no way to make a living. She had no car, no phone, and, on the last day I saw her alive, no electricity because she couldn’t afford to pay her utility bill. In October 2004, Sandy Meadows died alone and in poverty because the State of Louisiana wouldn’t allow her to work in a perfectly harmless occupation???and I couldn’t persuade a federal judge to protect her right to do so.

The element that appeals most to me about this deal is the removal of the assinine “cadellac plan” penaltax levied against group plans that provide coverage “in excess” of what King Obama deemed necessary for us serfs.

My employer historically provided good benefits to offset slightly lower pay in my area. Then the ACA came along and now it’s all about high-deductable CDHP’s and “voluntary” wellness programs. Granted, Price specifically allows premiums to be tied to wellness programs (of which I’m not a fan), but at least it doesn’t punish employers for actually providing decent benefits.

I had a cadillac plan a few years back. My employer pulled it due to the ACA. I have a feeling that it’s gone now and won’t ever come back. Fucking ACA. It’s got to be the worst thing Obama did during his 8 years.

I’m wondering about the big factory in town and how the ACA affects them. Some time back they figured out it would be cheaper to build their own clinic for their employees rather than paying routine-maintenance insurance bills. I’m not sure if having a company-provided clinic qualifies as a Cadillac plan but I’m sure one way or the other they’re getting punished by the government for not doing things the prescribed way, offering their employees free healthcare rather than free healthcare insurance.

That sounds like a sensible thing for a very large employer to do. Therefore it is probably illegal. I really wish we could 100 % scrap the relationship between employers and health insurance. I could use the money that my employer spends on my insurance to buy insurance in a free market, or save it, or blow it on useless shit, or whatever. The marriage of health care to employment really hurts people. I work with guys who are way ready to retire in a tell financial ways except healthcare. They can’t afford to quit their jobs until they hit medicare age. I think that’s pretty fucked up.

Pre-tax health care was first offered generally during WWII when there was a wage freeze but the big companies wanted someway to attract the better workers and the gov’t gave it the green light. The unions found out they loved it and it’s been growing ever since. Even health insurance in general, aside from catastrophic care, is a relatively recent thing.

Uber was great when it started. The best part was that you would get a fare estimate within a tight range and that would be what you paid. And someone with a clean car would come give you a ride. Then a tiny subgroup who contracted as drivers decided that they had a right to “make a living” on what was originally a way to use their (and their car’s) downtime as a way to make money they wouldn’t have had before. And those people, combined with Uber deciding to make money by tracking and perhaps even selling their riders’ location data are going to turn it to shit.

I’ve used it a few times. It’s always surprising when the ETA is measured in minutes and the fare is single-digit dollars. My brother and his wife used it last weekend for a holiday party at a casino a little ways outside of town. $16 bucks each way. Well worth it to drink and not drive.

In contract, we ordered up a cab once in the days before Uber. We’d gone out for the night and needed a ride to crash at a friend’s place a couple miles away. The fare came out to something ridiculous like forty bucks, they guy took his time showing up, and was surly and wouldn’t let anyone of our four-person group sit up front with him, so we crowded in the back.

Wow that was actually a useful article. Researched new policy. Compared it to old policy.

All of these “schemes” will suck compared to what could be if the market went to town on healthcare, but hopefully it will be a step in the right direction. Obamacare has been a real back-breaker. A lot more money in exchange for much worse insurance.

Did Russian hackers take over reason’s website? I have it on “Good Authority” that this website is staffed entirely by Progressive SJWs pretending to be libertarians while waiting for The Atlantic to hire them. AKA “CUCKZ ‘N’ FAGGITZ. Is the real Shika Dalmia tied to a chair in a basement somewhere with a ball gag in her mouth? What gives?

I nearly stopped reading after this. You don’t need 250 pages to fix what’s wrong with the healthcare industry. His plan sounds like it might be a less bad way of micromanaging the healthcare industry, but it’s still micromanaging the healthcare industry.

(Insurers won’t be allowed to turn away patients, no matter how sick, if they have maintained continuous coverage. And those who haven’t maintained coverage will be required to pay 150 percent of the normal rate for two years.)

LOL. Guaranteed death spiral. Under that scheme, no reasonably healthy person would buy health insurance until big expenses appear. (150 percent of normal is nothing when you’re facing big bills.)

The essence of insurance (of any kind) is that you don’t cover pre-existing conditions.

What if these health plans are about keeping hospitals solvent and not about your health or mine?

What if the real challenge is a sclerotic medical system, sustained by useless insurance companies, an obsolete paradigm that’s given us “big pharma,” and the AMA, which is a medieval guild?

What if we were to think about optimal nutrition, holistic and preventive medicine? Might a recasting of what we deem healthcare change how we live and treat ourselves, making the costs of care manageable?

I fail to see how “lavish employer paid health care plans” are a problem for anyone. I mean, they drive up nominal per capita health care spending, but so what? Nobody is hurt by my employer choosing to spend more on me.

In any case, the primary cause of high per capita health care spending in the US is Medicare and its enormously wasteful end-of-life spending.

“For starters, Price would deregulate the medical industry, scrapping Obamacare’s many mandates on insurance companies, save the one concerning pre-existing conditions. (Insurers won’t be allowed to turn away patients, no matter how sick, if they have maintained continuous coverage. And those who haven’t maintained coverage will be required to pay 150 percent of the normal rate for two years.) Price would also stop ordering insurers to cover a lavish set of minimum benefits to qualify to sell their plans on exchanges.”

I love that this paragraph opens with the intent to deregulate, and then immediatly implements/maintains an onerours regualtion in the very next sentence. Brilliant….I am full of hope =\